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GM says the strike cost it $ 2.9 billion



Nearly 50,000 temporary GM workers went on strike starting September 16, two weeks before the end of the quarter. It ended Saturday, October 26.

GM lost money because factories in the United States, as well as some in Canada and Mexico, were idling during the walkout. The strike directly affected 31 GM factories and 21 other facilities, spread across nine states, mostly in the center of the country.

The cost of the strike in the last two weeks of the third quarter was just under $ 750 million. GM will account for the rest of the loss this quarter, as it estimates the total loss will come to around $ 2 per share, the company said Tuesday.

GM was able to make a profit of $ 2.3 billion in the third quarter, despite strikes and sales of $ 31

8 million. In fact, revenue from North American vehicle sales increased by $ 321 million during the period when sales in the US increased by 6%. International sales, which ironically had little impact from the strike, hit one. The market for new car sales in China, GM's largest market, has declined significantly over the past year, cutting GM's sales there by 16%, as it lost market share in the important market.

Results were not as bad as investors had expected, and shares of GM ( GM ) rose 5% in midday trading on Tuesday after the report.

Although GM was unable to build any cars at US factories during the strike, it had built up a list of vehicles ahead of the walkout to give dealers access to the cars and trucks they needed to continue selling.

However, when GM plants come back to work, "without extra vehicles in the pipeline for many weeks, our dealership inventories will be temporarily slimmer than we will," says CEO Mary Barra.

Although GM is making every effort to restore the supply of vehicles to normal levels, Barra said it will be difficult to make up for six weeks of lost production, especially for the best-selling vehicles, including pickups and SUVs. GM's truck plant is already running around the clock.

"It is difficult to add overtime on top of overtime," said CFO Dhivya Suryadevara. "So we want to restore every device we possibly can. It's only hard to predict at this time what it will look like."

GM insisted that the four-year agreement reached with the United Auto Workers union is a good one.

  GM's strike is over. Now it is time for Ford and Chrysler to sign an agreement

"Our new employment agreement maintains our competitiveness, retains our flexibility and allows us to continue to improve our quality and productivity," said Barra. And she predicted that GM could find cost savings and productivity improvements over the next few years to cover the increased labor costs under the deal.

The employment agreement gives the strikers a signing bonus of $ 11,000 and increases the base salary of veteran autoworkers by 6% over the contract's four-year life to $ 32.32 per hour.
It also allows temporary workers to become permanent employees. The company lost its efforts to get union members to pay a significantly larger percentage of their health services. But GM denied the union's demand to move production from its Mexican plants back to US plants, and it will go ahead with plans to permanently close three US factories where operations were closed earlier this year.

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